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Gold rises on stimulus hints, weak dollar
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SAN FRANCISCO (MarketWatch) — Gold futures rose on Tuesday after China hinted at fresh economic stimulus and investors were more optimistic about prospects for the euro zone, which resulted in a weaker dollar.
Gold for December delivery advanced $19, or 1.2%, to $1,642.20 an ounce on the Comex division of the New York Mercantile Exchange. A settlement around those levels would be gold’s highest since early May. The metal on Monday ended at its highest level since mid-June, at $1,623 an ounce. Gold faced some resistance around $1,630 an ounce “but once it moved past that it just shot up,” said Howard Wen, a commodities research associate with HSBC.
A higher euro on the hopes for the euro zone and gains for platinum and palladium in the wake of violence in a South African platinum mine also helped gold move higher, he added. Gold was supported by monetary easing hints from China as the Chinese state-run Xinhua news agency’s Economic Information Daily reported that Beijing is planning fresh stimulus measures for the second half of the year.
The ICE dollar index which measures the greenback against a basket of six other currencies, fell to 81.860 from 82.475 in late North American trade the prior day. Dollar-denominated commodities tend to rise on a weaker dollar, as they get cheaper to buy for holders of other currencies.
The euro rallied Tuesday on the ECB expectations. There’s growing market optimism Europe’s monetary authorities will take steps to reduce borrowing costs for countries such as Spain and Italy. On Monday, however, the central bank said a report over the weekend that it was weighing a plan to cap sovereign-debt yield spreads was “misleading“ and Germany‘s central bank renewed its opposition to any bond-buying efforts.
Elsewhere in the metals complex, platinum for October delivery turned higher, up recently $11.20, or 0.7%, to $1,509 an ounce. The metal closed at its highest since early May on Monday following recent gains amid violence at a platinum mine in South Africa.
September silver rose 83 cents, or 2.9%, to $29.42 an ounce, while copper for the same month moved 8 cents higher, or 2.3%, to $3.45 a pound.
Palladium for September delivery gained $16.50, or 2.7%, to $624.20 an ounce.
Source: Gold rises on stimulus hints, weak dollar
2012-08-21 15:10:03
Source: http://www.pmbg.net/2012/08/gold-rises-stimulus-hints-weak-dollar
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